Fowler: System is unclear and inflexible
Reform of building safety regulations may encourage professional indemnity insurers to remove their block on conveyancers advising on certain transactions, CILEX has told the government.
It said that, without urgent change, the current regulations risk undermining government plans to deliver 1.5 million new homes by the end of this Parliament.
While acknowledging that the overarching aims of the Building Safety Act 2022 were laudable – improving the safety of residential and mixed-use developments – its implementation has created “a minefield” for conveyancers where the building is more than five storeys or 11 metres tall.
Responding to a House of Lords industry and regulators committee inquiry into the effectiveness of building safety regulations and the role of the Building Safety Regulator, CILEX said delays and uncertainty around the implementation and interpretation of the regulations, as well as delays caused by the regulator itself, have led to significant practical barriers for conveyancers – indeed, some have stopped advising on affected transactions altogether.
These problems meant that even those CILEX members who wanted to advise on, or certify compliance with, affected buildings struggled to secure adequate professional indemnity insurance (PII).
“This is because insurers see unacceptably high risks in lawyers navigating their clients through such a complex regime,” it went on.
Such exclusions in PII cover “present a systemic risk to the market”, with conveyancing professionals forced to decline instructions, restricting access to legal support.
This in turn delayed or prevented the sale and development of affected properties, particularly in the case of multi-unit dwellings, leaving developers and homeowners in limbo.
CILEX called for “practical and definitive guidance” on legal responsibilities under the 2022 Act and related instruments.
It wanted to see the government formally endorse such guidance “to provide confidence to stakeholders, enabling better risk management and, ultimately greater availability of PII for conveyancers carrying out this work”.
Any accompanying regulatory adjustments should be proportionate and risk-based to allow housing developments and transactions to be carried out safely, without unnecessary barriers.
CILEX president Sara Fowler commented: “The government has ambitious targets for the provision of new homes but the current regulatory regime around building safety risks inadvertently supressing supply. While is vital that we ensure all homes are safe, at present the system is unclear, inflexible and fraught with delays.
“A lack of PII cover prevents legal professionals from providing the services needed to enable the development and sale of affected homes and a failure to provide definitive guidance on legal responsibilities risks eroding trust in the legal profession to uphold public safety.
“We would like to see urgent reforms that remove barriers and provide certainty for the sector.”
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